Proxy Advisers Don't Help Shareholders

The 'best practices' they want companies to adopt are more accurately termed one-size-fits-all best guesses.

By

David F. Larcker And

Allan L. McCall

Dec. 8, 2013 6:51 p.m. ET

The Securities and Exchange Commission's roundtable on proxy advisory firms last week was long overdue. In July 2010, the agency asked for public comment about these organizations in light of growing concerns that "proxy advisory firms may be subject to conflicts of interest or may fail to conduct adequate research and base recommendations on erroneous or incomplete facts." Since then, silence.

Meanwhile, legislation including "say on pay" has increased the power of proxy advisory firms, especially the...